Walgreens to acquire Rite Aid
Walgreens Boots Alliance Inc. (Walgreens), Deerfield, Ill., and Camp Hill, Pa.-based Rite Aid Corp. said they entered into a definitive agreement under which Walgreens Boots Alliance will acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of approximately $17.2 billion, including acquired net debt. The purchase price represents a premium of 48 percent to the closing price per share on Oct. 26, the day before the agreement was signed.
The combination of Walgreens and Rite Aid will create a further opportunity to deliver a high-quality retail pharmacy choice for U.S. consumers in an evolving and increasingly personalized healthcare environment, the companies said.
Walgreens is highly focused on building a differentiated in-store experience for health, wellness and beauty, and this combination will help accelerate Rite Aid's own efforts toward that end. Once the acquisition closes, Walgreens plans to further transform Rite Aid's stores to better meet consumer needs, the companies noted.
"Today's announcement is another step in Walgreens Boots Alliance's global development and continues our profitable growth strategy," said Stefano Pessina, the company's executive vice chairman and CEO. "In both mature and newer markets across the world, our approach is to advance and broaden the delivery of retail health, wellbeing and beauty products and services. This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients. John Standley, Rite Aid's chairman and CEO, said the move will enhance Rite Aid's ability to meet customer health and wellness needs while delivering value to shareholders.
"This transaction is a testament to the hard work of all our associates to deliver a higher level of care to the patients and communities we serve," he said. "Together with Walgreens Boots Alliance, the Rite Aid team can continue to build upon this great work through access to increased capital that will enhance our store base and expand opportunities as part of the first global pharmacy-led, health and wellbeing enterprise."
The boards of directors of both companies approved the transaction, which is subject to approval by the holders of Rite Aid's common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions, the companies said. The transaction is expected to close in the second half of calendar 2016.
Upon completion of the merger, Rite Aid will be a wholly owned subsidiary of Walgreens Boots Alliance, the companies added, and is expected to operate initially under its existing brand name.